Britannia Industries (BRITANNIA) Q4 96/97 earnings summary

Executive summary

• FY97 corporate sales rose 25% to Rs 7,523.3m; operating profit increased 33% to Rs 233.0m and net profit rose 12% to Rs 178.8m.

• Growth was driven mainly by biscuits and cakes, with marketing and operating efficiencies offsetting higher input costs; bread remained under pressure.

Financial highlights

• Sales Rs 7,523.3m vs Rs 6,023.8m; operating profit before depreciation Rs 305.7m vs Rs 229.3m; operating profit Rs 233.0m vs Rs 175.0m.

• PBT Rs 294.8m vs Rs 270.3m; PAT Rs 178.8m vs Rs 160.1m; EPS Rs 9.63 vs Rs 8.62.

• Cash flow generation rose 11% to Rs 260m; cash flow per share increased to Rs 14.00 from Rs 12.66.

• Proposed dividend Rs 4.00/share, equal to 40% of equity share capital; dividend outlay Rs 74.3m.

Outlook and guidance

• FY98 plans focus on rapid execution of the bakery restructuring programme, mass-market growth, new products and continued cost and production efficiency.

• Biscuit de-reservation from April 1997 removes capacity restrictions while intensifying competition and increasing pressure for lower production costs and broader quality ranges.

• Cheese and dairy whitener launches are part of diversification into food and beverages, with further adjacent product opportunities under review.